Hojeon: Activist Minority Investors Threaten to Sell Their Shares to a Competitor in a Block Deal

• A group of minority investors started to go activist on Hojeon (111110 KS), demanding that the company increase its treasury share buybacks/cancellations, dividends, and cut CEO's salary.

• This coalition of minority investors has threatened to sell their shares to a competitor (Hansae) if the company does not abide by their demands.

• Hojeon has attractive valuations and are trading at low multiples. It had P/E of 5x, EV/EBITDA of 3.4x, and P/B of 0.5x in 2023.

In recent days, a group of minority investors started to go activist on Hojeon (111110 KS), demanding that the company increase its treasury share buybacks/cancellations, dividends, and cut CEO's salary.

On top of this, this coalition of minority investors (about 15) (which own about 8.8% of outstanding shares) has threatened to sell their shares to a competing company Hansae Co Ltd (105630 KS) if the company does not abide by their demands.

What is unusual about this corporate activism is that while there are occasional cases of a group of local minority investors gathering together to go activist on particular company, it is rare for such coalition of minority investors to actually threaten to sell their shares to a competing company in a BLOCK DEAL.